Korea’s Growth at Bottom in Asia
By Na Jeong-ju
Staff Reporter
South Korea's economic growth was far lower than most of its Asian rivals in the first quarter due to a stronger Korean currency and high oil prices, the Bank of Korea (BOK) said Wednesday.
The country's real gross domestic product (GDP) grew 4 percent from a year ago during the January-March period. Relative to the world average the figure is not so bad, but very low by regional standards.
During the same period, China's economy expanded 11.1 percent, while India posted a 9.1 percent gain, Singapore 6.1 percent and Taiwan 4.2 percent.
Hit by a stronger won and higher prices of raw materials, the country's manufacturing sector shrank 0.9 percent in the first quarter, the first negative growth since the first quarter of 2003.
The central bank said Korean exporters are competing under less favorable trade conditions, but it expected the situation to get better.
There are growing concerns that the world's 12th largest economy, ``sandwiched'' between Japan and China, may lose its competitive edge fast if it fails to develop new economic growth engines.
South Korea exported $31.25 billion worth of goods in May, the largest monthly overseas shipment. However, a fall in prices of key export items, such as semiconductors, and high oil prices cut exporters' earnings.
The central bank forecast economic growth would gain momentum in the latter half. The country is expected to achieve an economic growth rate of 4.4 percent this year as earlier anticipated. Last year, the economy grew 5 percent year-on-year.